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S I X T H E D I T I O N

PRODUCT DESIGN

AND DEVELOPMENT

PRODUCT DESIGN AND DEVELOPMENT, SIXTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121 Copyright © 2016 by McGraw-Hill Education All rights reserved Printed in the United States of America Previous editions © 2012, 2008, and 2004 No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent

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Library of Congress Cataloging-in-Publication Data

Ulrich, Karl T.

Product design and development / Karl T Ulrich, University of Pennsylvania, Steven D Eppinger,

Massachusetts Institute of Technology —Sixth edition.

pages cm

ISBN 978-0-07-802906-6 (alk paper) — ISBN 0-07-802906-6 (alk paper) 1 New Products—Decision making—

Methodology—Case studies 2 Product design—Cost effectiveness—Case studies

3 Production engineering—Case studies I Eppinger, Steven D II Title

TS171.U47 2015

658.5 9752—dc23

2015001250

The Internet addresses listed in the text were accurate at the time of publication The inclusion of a website does not indicate

an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

www.mhhe.com

To the professionals who shared their experiences with us and

to the product development teams we hope will benefit from those experiences.

About the Authors

Karl T Ulrich University of Pennsylvania

is the CIBC Professor and Vice Dean of Innovation at the Wharton School at the sity of Pennsylvania and is also Professor of Mechanical Engineering He received the S.B., S.M., and Sc.D degrees in Mechanical Engineering from MIT Professor Ulrich has led the development efforts for many products, including medical devices and sport-ing goods, and is the founder of several technology-based companies As a result of this work, he has received more than 24 patents His current research concerns technological innovation, product design, and entrepreneurship

Univer-Steven D Eppinger Massachusetts Institute of Technology

is the General Motors LGO Professor of Management Science and Innovation at the Massachusetts Institute of Technology Sloan School of Management and is also Professor

of Engineering Systems at MIT He received the S.B., S.M., and Sc.D degrees in Mechanical Engineering from MIT and served as Deputy Dean of the MIT Sloan School for five years He specializes in the management of complex product development pro-cesses and has worked extensively with the automobile, electronics, aerospace, medical devices, and capital equipment industries His current research is aimed at the creation of improved product development practices, systems engineering methods, and project man-agement techniques

iv

This book contains material developed for use in the interdisciplinary courses on product development that we teach Participants in these courses include graduate students in en-gineering, industrial design students, and MBA students While we aimed the book at in-terdisciplinary graduate-level audiences such as this, many faculty teaching graduate and

undergraduate courses in engineering design have also found the material useful Product

Design and Development is also for practicing professionals Indeed, we could not avoid

writing for a professional audience, because most of our students are themselves sionals who have worked either in product development or in closely related functions.This book blends the perspectives of marketing, design, and manufacturing into a single approach to product development As a result, we provide students of all kinds with

profes-an appreciation for the realities of industrial practice profes-and for the complex profes-and essential roles played by the various members of product development teams For industrial prac-titioners, in particular, we provide a set of product development methods that can be put into immediate practice on development projects

A debate often heard in the academic community relates to whether design should be taught primarily by establishing a foundation of theory or by engaging students in loosely supervised practice For the broader activity of product design and development, we reject both approaches when taken to their extremes Theory without practice is ineffec-tive because there are many nuances, exceptions, and subtleties to be learned in practical settings and because some necessary tasks simply lack sufficient theoretical underpin-nings Practice without guidance can too easily result in frustration and fails to exploit the knowledge that successful product development professionals and researchers have accumulated over time Product development, in this respect, is like sailing: proficiency

is gained through practice, but some theory of how sails work and some instruction in the mechanics (and even tricks) of operating the boat help tremendously

We attempt to strike a balance between theory and practice through our emphasis on methods The methods we present are typically step-by-step procedures for completing tasks, but rarely embody a clean and concise theory In some cases, the methods are sup-ported in part by a long tradition of research and practice, as in the chapter on product development economics In other cases, the methods are a distillation of relatively recent

and ad hoc techniques, as in the chapter on design for environment In all cases, the

methods provide a concrete approach to solving a product development problem In our experience, product development is best learned by applying structured methods to ongo-ing project work in either industrial or academic settings Therefore, we intend this book

to be used as a guide to completing development tasks either in the context of a course project or in industrial practice

An industrial example or case study illustrates every method in the book We chose to use different products as the examples for each chapter rather than carrying the same example through the entire book We provide this variety because we think it makes the

v

book more interesting and because we hope to illustrate that the methods can be applied

to a wide range of products, from industrial equipment to consumer products

We designed the book to be extremely modular—it consists of 19 independent ters Each chapter presents a development method for a specific portion of the product development process The primary benefit of the modular approach is that each chapter can be used independently of the rest of the book This way, faculty, students, and practi-tioners can easily access the material they find most useful

chap-This sixth edition of the book includes a new chapter on design of services, as well as updated examples and data We have also revised the book throughout with insights from recent research and innovations in practice

To supplement this textbook, we have developed a Web site on the Internet This is intended to be a resource for instructors, students, and practitioners We will keep the site current with additional references, examples, and links to available resources related to the product development topics in each chapter Please make use of this information via the Internet at www.ulrich-eppinger.net

The application of structured methods to product development also facilitates the study and improvement of development processes We hope, in fact, that readers will use the ideas in this book as seeds for the creation of their own development methods, uniquely suited to their personalities, talents, and company environments We encourage readers to share their experiences with us and to provide suggestions for improving this material Please write to us with your ideas and comments at ulrich@wharton.upenn.edu and eppinger@mit.edu

Acknowledgments

Hundreds of people contributed to this book in large and small ways We are grateful to the many industrial practitioners who provided data, examples, and insights We appreci-ate the assistance we have received from numerous academic colleagues, research assis-tants, and support staff, from our sponsors, and from the McGraw-Hill team Indeed we could not have completed this project without the cooperation and collaboration of many professionals, colleagues, and friends Thank you all

Financial support for the initial development of this textbook came from the Alfred P Sloan Foundation, from the MIT Leaders for Manufacturing Program, and from the MIT Center for Innovation in Product Development

Many industrial practitioners helped us in gathering data and developing examples We would particularly like to acknowledge the following: Richard Ahern, Liz Altman, Lindsay Anderson, Terri Anderson, Mario Belsanti, Mike Benjamin, Scott Beutler, Bill Burton, Michael

Carter, Jim Caruso, Pat Casey, Scott Charon, Victor Cheung, James Christian, Alan Cook,

David Cutherell, Tim Davis, Tom Davis, John Elter, George Favaloro, Marc Filerman, David Fitzpatrick, Gregg Geiger, Anthony Giordano, David Gordon, Kamala Grasso, Matt Haggerty, Rick Harkey, Matthew Hern, Alan Huffenus, Art Janzen, Randy Jezowski, Carol Keller, Matt Kressy, Edward Kreuzer, David Lauzun, Peter Lawrence, Brian Lee, David Levy, Jonathan Li, Albert Lucchetti, Brint Markle, Paul Martin, Doug Miller, Leo Montagna, Al Nagle, John Nicklaus, Hossain Nivi, Chris Norman, Paolo Pascarella, E Timothy Pawl, Paul Piccolomini, Amy Potts, Earl Powell, Jason Ruble, Virginia Runkle, Nader Sabbaghian, Mark Schurman, Norm Seguin, David Shea, Wei-Ming Shen, Sonja Song, Leon Soren, Paul Staelin, Michael Stephens, Scott Stropkay, Larry Sullivan, Malcom Taylor, Brian Vogel, David Webb, Bob Weisshappel, Dan Williams, Gabe Wing, and Mark Winter

We have received tremendous assistance from our colleagues who have offered quent encouragement and support for our somewhat unusual approach to teaching and research, some of which is reflected in this book We are especially indebted to the MIT Leaders for Manufacturing (LFM) Program and to the MIT Center for Innovation in Product Development (CIPD), two exemplary partnerships involving major manufactur-ing firms and MIT’s engineering and management schools We have benefited from col-laboration with the faculty and staff associated with these programs, especially Gabriel Bitran, Kent Bowen, Don Clausing, Tom Eagar, Charlie Fine, Woodie Flowers, Steve Graves, John Hauser, Rebecca Henderson, Maurice Holmes, Tom Magnanti, Kevin Otto, Don Rosenfield, Warren Seering, Shoji Shiba, Anna Thornton, Jim Utterback, Eric von Hippel, Dave Wallace, and Dan Whitney We have received financial support from LFM, CIPD, and the Gordon Book Fund Most important, LFM and CIPD partner companies have provided us with unparalleled access to industrial projects and research problems in product development and manufacturing

fre-Several faculty members have helped us by reviewing chapters and providing feedback from their in-class trials in teaching with this material We are particularly grateful to

these reviewers and “beta testers”: Alice Agogino, Steven Beyerlein, Don Brown, Steve Brown, Charles Burnette, Gary Cadenhead, Roger Calantone, Cho Lik Chan, Kim Clark, Richard L Clark, Jr., Morris Cohen, Denny Davis, Michael Duffey, William Durfee, Donald Elger, Josh Eliashberg, David Ellison, Woodie Flowers, Gary Gabriele, Paulo Gomes, Abbie Griffin, Marc Harrison, Rebecca Henderson, Tim Hight, Mike Houston, Marco Iansiti, Kos Ishii, Nitin Joglekar, R T Johnson, Kyoung-Yun “Joseph” Kim, Annette Köhler, Viswanathan Krishnan, Yuyi Lin, Richard Locke, Bill Lovejoy, Jeff Meldman, Farrokh Mistree, Donatus Ohanehi, Wanda Orlikowski, Louis Padulo,  Matthew Parkinson, Robert Pelke, Warren Seering, Paul Sheng, Robert Smith, Carl Sorensen, Mark Steiner, Cassandra Telenko, Christian Terwiesch, Chuck Turtle, Marcie Tyre, Dan Whitney, Kristin Wood, Maria Yang, and Khim-Teck Yeo.

Several industrial practitioners and training experts have also assisted us by reviewing and commenting on draft chapters: Wesley Allen, Geoffrey Boothroyd, Gary Burchill, Clay Burns, Eugene Cafarelli, James Carter, Kimi Ceridon, David Cutherell, Gerard Furbershaw, Jack Harkins, Gerhard Jünemann, David Meeker, Ulrike Närger, B Joseph Pine II, William Townsend, Brian Vogel, and John Wesner

We also wish to acknowledge the more than 1,000 students in the classes in which we have tested these teaching materials These students have been in several teaching programs

at MIT, Helsinki University of Technology, Rhode Island School of Design, HEC Paris, STOA (Italy), University of Pennsylvania, and Nanyang Technological University (Singa-pore) Many students provided constructive comments for improving the structure and deliv-ery of the material finally contained here Also, our experiences in observing the students’ use

of these methods in product development projects have greatly helped us refine the material.Several students served as research assistants to help investigate many of the develop-ment methods, examples, and data contained in the book These individuals are Michael Baeriswyl (Chapters 12, 17, and 18), Anitha Balasubramaniam (Chapter 18), Paul Brody (Chapter 11), Tom Foody (Chapter 18), Amy Greenlief (Chapter 14), Christopher Hession (Chapter 4), Eric Howlett (Chapter 8), Timothy Li (Chapter 5), Tom Pimmler (Chapter 13 Appendices), Stephen Raab (Chapter 19), Harrison Roberts (Chapter 13 Appendices), Jonathan Sterrett (Chapter 5), and Gavin Zau (Chapter 7)

Other MIT students have also contributed by assisting with data collection and by fering comments and stimulating criticisms related to some of the chapters: Tom Abell,

of-E Yung Cha, Steve Daleiden, Russell Epstein, Matthew Fein, Brad Forry, Mike Frauens, Ben Goss, Daniel Hommes, Bill Liteplo, Habs Moy, Robert Northrop, Leslie Prince Rudolph, Vikas Sharma, and Ranjini Srikantiah

The staff throughout the McGraw-Hill Education organization has been superb We are particularly grateful for the support of our sponsoring editor Laura Hurst Spell We also appreciate the efforts of project managers Heather Ervolino and Mary Jane Lampe, copy editor Rich Wright, photo researcher Mary Reeg

Finally, we thank our families for their love and support Our parents provided much encouragement Nancy, Julie, Lauren, Andrew, Jamie, and Nathan have shown endless patience over the years of this ongoing product development project

Karl T Ulrich Steven D Eppinger

12 Design for Environment 231

13 Design for Manufacturing 255

Who Designs and Develops Products? 3

Duration and Cost of Product

Development 5

The Challenges of Product Development 6

Approach of This Book 6

Structured Methods 7

Industrial Examples 7

Organizational Realities 7

Roadmap of the Book 8

References and Bibliography 10

The Product Development Process 12

Concept Development: The Front-End

Organizations Are Formed by Establishing Links among Individuals 25

Organizational Links May Be Aligned with Functions, Projects, or Both 25

Choosing an Organizational Structure 28 Distributed Product Development Teams 28

The Tyco Product Development Organization 30

Summary 30References and Bibliography 31Exercises 32

Thought Questions 32

Chapter 3 Opportunity Identification 33

What Is an Opportunity? 34

Types of Opportunities 34

Tournament Structure of Opportunity Identification 36

Effective Opportunity Tournaments 37

Opportunity Identification Process 39Step 1: Establish a Charter 39Step 2: Generate and Sense Many Opportunities 40

Techniques for Generating Opportunities 40

Step 3: Screen Opportunities 46Step 4: Develop Promising Opportunities 47Step 5: Select Exceptional Opportunities 47Step 6: Reflect on the Results and the Process 49

Summary 50References and Bibliography 50Exercises 51

Thought Questions 51

References and Bibliography 89Exercises 90

Thought Questions 90

Chapter 6 Product Specifications 91

What Are Specifications? 92When Are Specifications Established? 93Establishing Target Specifications 94

Step 1: Prepare the List of Metrics 95 Step 2: Collect Competitive Benchmarking Information 99

Step 3: Set Ideal and Marginally Acceptable Target Values 99

Step 4: Reflect on the Results and the Process 103

Setting the Final Specifications 103

Step 1: Develop Technical Models of the Product 105 Step 2: Develop a Cost Model of the Product 106 Step 3: Refine the Specifications, Making Trade-Offs Where Necessary 108

Step 4: Flow Down the Specifications as Appropriate 109

Step 5: Reflect on the Results and the Process 111

Summary 111References and Bibliography 112Exercises 113

Thought Questions 113

Appendix Target Costing 114

Chapter 7 Concept Generation 117

The Activity of Concept Generation 118

Structured Approaches Reduce the Likelihood of Costly Problems 119

A Five-Step Method 119

Step 1: Clarify the Problem 120

Decompose a Complex Problem into Simpler Subproblems 121

Focus Initial Efforts on the Critical Subproblems 123

Step 2: Search Externally 124

Interview Lead Users 124 Consult Experts 125

Chapter 4

Product Planning 53

The Product Planning Process 54

Four Types of Product Development Projects 55

The Process 56

Step 1: Identify Opportunities 57

Step 2: Evaluate and Prioritize Projects 57

Competitive Strategy 58

Market Segmentation 58

Technological Trajectories 59

Product Platform Planning 60

Evaluating Fundamentally New Product

Opportunities 61

Balancing the Portfolio 63

Step 3: Allocate Resources and Plan Timing 64

Resource Allocation 64

Project Timing 66

The Product Plan 66

Step 4: Complete Pre-Project Planning 66

Mission Statements 67

Assumptions and Constraints 68

Staffing and Other Pre-Project Planning

Identifying Customer Needs 73

The Importance of Latent Needs 75

The Process of Identifying Customer Needs 75

Step 1: Gather Raw Data from Customers 77

Choosing Customers 78

The Art of Eliciting Customer Needs Data 79

Documenting Interactions with Customers 81

Step 2: Interpret Raw Data in Terms of Customer

Needs 82

Step 3: Organize the Needs into a Hierarchy 84

Step 4: Establish the Relative Importance of the

Needs 86

Step 5: Reflect on the Results and the Process 87

Summary 88

Contents xi

Appendix A Concept-Screening Matrix Example 164 Appendix B

Concept-Scoring Matrix Example 165

Chapter 9 Concept Testing 167

Step 1: Define the Purpose of the Concept Test 169Step 2: Choose a Survey Population 169

Step 3: Choose a Survey Format 170Step 4: Communicate the Concept 171

Matching the Survey Format with the Means of Communicating the Concept 175

Issues in Communicating the Concept 175

Step 5: Measure Customer Response 177Step 6: Interpret the Results 177

Step 7: Reflect on the Results and the Process 180Summary 181

References and Bibliography 181Exercises 182

Thought Questions 182

Appendix Estimating Market Sizes 183

Chapter 10 Product Architecture 185

What Is Product Architecture? 186

Types of Modularity 188 When Is the Product Architecture Defined? 189

Implications of the Architecture 189

Product Change 189 Product Variety 190 Component Standardization 191 Product Performance 191 Manufacturability 192 Product Development Management 192

Establishing the Architecture 193

Step 1: Create a Schematic of the Product 193 Step 2: Cluster the Elements of the Schematic 195 Step 3: Create a Rough Geometric Layout 197 Step 4: Identify the Fundamental and Incidental Interactions 198

Delayed Differentiation 199Platform Planning 202

Search Patents 125

Search Published Literature 126

Benchmark Related Products 127

Step 3: Search Internally 127

Both Individual and Group Sessions Can Be

Useful 128

Hints for Generating Solution Concepts 129

Step 4: Explore Systematically 131

Concept Classification Tree 132

Concept Combination Table 134

Managing the Exploration Process 137

Step 5: Reflect on the Solutions and the

Step 1: Prepare the Selection Matrix 152

Step 2: Rate the Concepts 153

Step 3: Rank the Concepts 154

Step 4: Combine and Improve the Concepts 154

Step 5: Select One or More Concepts 154

Step 6: Reflect on the Results and the Process 155

Concept Scoring 156

Step 1: Prepare the Selection Matrix 156

Step 2: Rate the Concepts 157

Step 3: Rank the Concepts 158

Step 4: Combine and Improve the Concepts 158

Step 5: Select One or More Concepts 158

Step 6: Reflect on the Results and the Process 159

What Is Design for Environment? 233

Two Life Cycles 234 Environmental Impacts 235 History of Design for Environment 236 Herman Miller’s Journey toward Design for Environment 236

The Design for Environment Process 237Step 1: Set the DFE Agenda: Drivers, Goals, and Team 238

Identify the Internal and External Drivers of DFE 238 Set the DFE Goals 239

Set Up the DFE Team 240

Step 2: Identify Potential Environmental Impacts 241

Step 3: Select DFE Guidelines 242Step 4: Apply the DFE Guidelines to the Initial Product Design 244

Step 5: Assess the Environmental Impacts 245

Compare the Environmental Impacts to DFE Goals 246

Step 6: Refine the Product Design to Reduce or Eliminate the Environmental Impacts 246Step 7: Reflect on the DFE Process and Results 247

Summary 249References and Bibliography 249Exercises 250

Thought Questions 251

Appendix Design for Environment Guidelines 252

Chapter 13 Design for Manufacturing 255

Design for Manufacturing Defined 257

DFM Requires a Cross-Functional Team 257 DFM Is Performed throughout the Development Process 257

Overview of the DFM Process 258

Differentiation Plan 202

Commonality Plan 202

Managing the Trade-Off between Differentiation and

Commonality 203

Related System-Level Design Issues 204

Defining Secondary Systems 204

Establishing the Architecture of the Chunks 205

Creating Detailed Interface Specifications 205

What Is Industrial Design? 211

Assessing the Need for Industrial Design 213

Expenditures for Industrial Design 213

How Important Is Industrial Design to a Product? 213

Ergonomic Needs 214

Aesthetic Needs 215

The Impact of Industrial Design 215

Is Industrial Design Worth the Investment? 215

How Does Industrial Design Establish a Corporate

Identity? 218

The Industrial Design Process 219

1 Investigation of Customer Needs 219

2 Conceptualization 219

3 Preliminary Refinement 220

4 Further Refinement and Final Concept

Selection 221

5 Control Drawings or Models 222

6 Coordination with Engineering, Manufacturing,

and External Vendors 222

The Impact of Computer-Based Tools on the ID

Process 222

Management of the Industrial Design Process 223

Timing of Industrial Design Involvement 224

Assessing the Quality of Industrial Design 226

1 Quality of the User Interface 226

2 Emotional Appeal 226

3 Ability to Maintain and Repair the Product 226

4 Appropriate Use of Resources 228

5 Product Differentiation 228

Summary 228

Chapter 14 Prototyping 291

Understanding Prototypes 293

Types of Prototypes 293 What Are Prototypes Used For? 296

Planning for Prototypes 305

Step 1: Define the Purpose of the Prototype 305 Step 2: Establish the Level of Approximation of the Prototype 306

Step 3: Outline an Experimental Plan 306 Step 4: Create a Schedule for Procurement, Construction, and Testing 306

Planning Milestone Prototypes 307

Summary 308References and Bibliography 309Exercises 310

Thought Questions 310

Chapter 15 Robust Design 313

What Is Robust Design? 314

Design of Experiments 316 The Robust Design Process 317

Step 1: Identify Control Factors, Noise Factors, and Performance Metrics 317

Step 2: Formulate an Objective Function 318Step 3: Develop the Experimental Plan 319

Experimental Designs 319 Testing Noise Factors 321

Step 4: Run the Experiment 323Step 5: Conduct the Analysis 323

Step 1: Estimate the Manufacturing Costs 258

Transportation Costs 261

Fixed Costs versus Variable Costs 261

The Bill of Materials 262

Estimating the Costs of Standard Components 263

Estimating the Costs of Custom Components 263

Estimating the Cost of Assembly 264

Estimating the Overhead Costs 265

Step 2: Reduce the Costs of Components 266

Understand the Process Constraints and Cost

Standardize Components and Processes 268

Adhere to “Black Box” Component

Procurement 269

Step 3: Reduce the Costs of Assembly 270

Keeping Score 270

Integrate Parts 270

Maximize Ease of Assembly 271

Consider Customer Assembly 272

Step 4: Reduce the Costs of Supporting

The Impact of DFM on Development Time 274

The Impact of DFM on Development Cost 274

The Impact of DFM on Product Quality 275

The Impact of DFM on External Factors 275

Contents xv

In What Ways Are Services and Products Different? 357

The Service Design Process 358

The Service Concept 358 Concept Development at Zipcar 360 The Service Process Flow Diagram 361 Subsequent Refinement 362

Downstream Development Activities in Services 362

Prototyping a Service 363 Growing Services 364 Continuous Improvement 364

Summary 365References and Bibliography 366Exercises 366

Thought Questions 367

Chapter 18 Product Development Economics 369

Elements of Economic Analysis 370

Quantitative Analysis 370 Qualitative Analysis 371 When Should Economic Analysis Be Performed? 371 Economic Analysis Process 372

Step 1: Build a Base-Case Financial Model 372

Estimate the Timing and Magnitude of Future Cash Inflows and Outflows 372

Compute the Net Present Value of the Cash Flows 374 Other Cash Flows 375

Supporting Go/No-Go and Major Investment Decisions 376

Step 2: Perform Sensitivity Analysis 377

Development Cost Example 377 Development Time Example 379 Understanding Uncertainties 380

Step 3: Use Sensitivity Analysis to Understand Trade-Offs 380

Potential Interactions 382 Trade-Off Rules 383 Limitations of Quantitative Analysis 384

Step 4: Consider the Influence of Qualitative Factors 385

Projects Interact with the Firm, the Market, and the Macro Environment 385

Carrying Out Qualitative Analysis 387

Computing the Objective Function 323

Computing Factor Effects by Analysis of Means 324

Step 6: Select and Confirm Factor Setpoints 325

Step 7: Reflect and Repeat 325

Patents and Intellectual Property 333

What Is Intellectual Property? 334

Overview of Patents 335

Utility Patents 336

Preparing a Disclosure 336

Step 1: Formulate a Strategy and Plan 338

Timing of Patent Applications 338

Type of Application 339

Scope of Application 340

Step 2: Study Prior Inventions 340

Step 3: Outline Claims 341

Step 4: Write the Description of the Invention 342

Figures 343

Writing the Detailed Description 343

Defensive Disclosure 344

Step 5: Refine Claims 345

Writing the Claims 345

Guidelines for Crafting Claims 348

Step 6: Pursue Application 348

Step 7: Reflect on the Results and the Process 350

Modeling Uncertain Cash Flows Using Net

Present Value Analysis 393

Chapter 19

Managing Projects 397

Understanding and Representing Tasks 398

Sequential, Parallel, and Coupled Tasks 398

The Design Structure Matrix 400

Gantt Charts 401

PERT Charts 402

The Critical Path 402

Baseline Project Planning 403

The Contract Book 403 Project Task List 403 Team Staffing and Organization 405 Project Schedule 406

Project Budget 407 Project Risk Plan 407 Modifying the Baseline Plan 409

Accelerating Projects 409Project Execution 412

Coordination Mechanisms 412 Assessing Project Status 414 Corrective Actions 414

Postmortem Project Evaluation 416Summary 417

References and Bibliography 418Exercises 420

Thought Questions 420

Appendix Design Structure Matrix Example 421

Index 423

Introduction

Clockwise from top left: Courtesy of Belle-V LLC; Courtesy of AvaTech; ©Oleksiy Maksymenko Photography/Alamy; ©Oleksiy

Maksymenko Photography/Alamy; ©Robert Clayton/Alamy.

EXHIBIT 1-1

Examples of engineered, discrete, physical products (clockwise from top left): Belle-V Ice Cream Scoop, AvaTech Avalanche Probe, iRobot Roomba Vacuum Cleaner, Tesla Model S Automobile, Boeing 787 Aircraft.

The economic success of most firms depends on their ability to identify the needs of tomers and to quickly create products that meet these needs and can be produced at low cost Achieving these goals is not solely a marketing problem, nor is it solely a design problem or a manufacturing problem; it is a product development problem involving all

cus-of these functions This book provides a collection cus-of methods intended to enhance the abilities of cross-functional teams to work together to develop products

A product is something sold by an enterprise to its customers Product development is

the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product Although much of the material in this book is useful in the development of any product, we explicitly focus on products that are engineered, discrete, and physical Exhibit 1-1 displays several examples of products from this category Because we focus on engineered products, the book applies better to the development of power tools and computer peripherals than to magazines or sweaters Our focus on discrete goods makes the book less applicable to the development of prod-ucts such as gasoline, nylon, and paper Because of the focus on physical products, we do not emphasize the specific issues involved in developing services or software Even with these restrictions, the methods presented apply well to a broad range of products, includ-ing, for example, consumer electronics, sports equipment, scientific instruments, machine tools, and medical devices

The goal of this book is to present in a clear and detailed way a set of product ment methods aimed at bringing together the marketing, design, and manufacturing func-tions of the enterprise In this introductory chapter, we describe some aspects of the industrial practice of product development and provide a roadmap of the book

develop-Characteristics of Successful Product Development

From the perspective of the investors in a for-profit enterprise, successful product opment results in products that can be produced and sold profitably, yet profitability is often difficult to assess quickly and directly Five more specific dimensions, all of which ultimately relate to profit, are commonly used to assess the performance of a product development effort:

devel-• Product quality: How good is the product resulting from the development effort? Does

it satisfy customer needs? Is it robust and reliable? Product quality is ultimately reflected in market share and the price that customers are willing to pay

• Product cost: What is the manufacturing cost of the product? This cost includes

spending on capital equipment and tooling as well as the incremental cost of ing each unit of the product Product cost determines how much profit accrues to the firm for a particular sales volume and a particular sales price

produc-• Development time: How quickly did the team complete the product development

effort? Development time determines how responsive the firm can be to competitive forces and to technological developments, as well as how quickly the firm receives the economic returns from the team’s efforts

• Development cost: How much did the firm have to spend to develop the product?

Develop-ment cost is usually a significant fraction of the investDevelop-ment required to achieve the profits

Introduction 3

• Development capability: Are the team and the firm better able to develop future

prod-ucts as a result of their experience with a product development project? Development capability is an asset the firm can use to develop products more effectively and eco-nomically in the future

High performance, along these five dimensions, should ultimately lead to economic cess; however, other performance criteria are also important These criteria arise from inter-ests of other stakeholders in the enterprise, including the members of the development team, other employees, and the community in which the product is manufactured Members of the development team may be interested in creating an inherently exciting product Members of the community in which the product is manufactured may be concerned about the degree to which the product creates jobs Both production workers and users of the product hold the development team accountable to high safety standards, whether or not these standards can

suc-be justified on the strict basis of profitability Other individuals, who may have no direct connection to the firm or the product, may demand that the product make ecologically sound use of resources and create minimal dangerous waste products

Who Designs and Develops Products?

Product development is an interdisciplinary activity requiring contributions from nearly all the functions of a firm; however, three functions are almost always central to a product development project:

• Marketing: The marketing function mediates the interactions between the firm and its

customers Marketing often facilitates the identification of product opportunities, the definition of market segments, and the identification of customer needs Marketing also typically arranges for communication between the firm and its customers, sets tar-get prices, and oversees the launch and promotion of the product

• Design: The design function plays the lead role in defining the physical form of the

product to best meet customer needs In this context, the design function includes engineering design (mechanical, electrical, software, etc.) and industrial design (aes-thetics, ergonomics, user interfaces)

• Manufacturing: The manufacturing function is primarily responsible for designing,

oper-ating, and/or coordinating the production system in order to produce the product Broadly defined, the manufacturing function also often includes purchasing, distribution, and

installation This collection of activities is sometimes called the supply chain.

Different individuals within these functions often have specific disciplinary training in areas such as market research, mechanical engineering, electrical engineering, materials science, or manufacturing operations Several other functions, including finance and sales, are frequently involved on a part-time basis in the development of a new product Beyond these broad functional categories, the specific composition of a development team depends on the particular characteristics of the product

Rarely are products developed by a single individual The collection of individuals

developing a product forms the project team This team usually has a single team leader,

who could be drawn from any of the functions of the firm The team can be thought of as

consisting of a core team and an extended team In order to work together effectively, the

core team usually remains small enough to meet in a conference room, while the extended team may consist of dozens, hundreds, or even thousands of other members

(Even though the term team is inappropriate for a group of thousands, the word is often

used in this context to emphasize that the group must work toward a common goal.) In most cases, a team within the firm will be supported by individuals or teams at partner companies, suppliers, and consulting firms Sometimes, as is the case for the develop-ment of a new airplane, the number of external team members may be even greater than that of the team within the company whose name will appear on the final product The composition of a team for the development of an electromechanical product of modest complexity is shown in Exhibit 1-2

Throughout this book we assume that the team is situated within a firm In fact, a profit manufacturing company is the most common institutional setting for product devel-opment, but other settings are possible Product development teams sometimes work within consulting firms, universities, government agencies, and nonprofit organizations

for-Extended Team

(Including Suppliers)

Core Team

Finance Sales Legal

Marketing Professional

Industrial Designer

Manufacturing Engineer

Mechanical Designer

Electronics Designer

Purchasing Specialist TEAM

LEADER

EXHIBIT 1-2 The composition of a product development team for an electromechanical product of modest complexity.

Introduction 5

Duration and Cost of Product Development

Most people without experience in product development are astounded by how much time and money are required to develop a new product The reality is that very few prod-ucts can be developed in less than 1 year, many require 3 to 5 years, and some take as long as 10 years Exhibit 1-1 shows five engineered, discrete products Exhibit 1-3 is a table showing the approximate scale of the associated product development efforts along with some distinguishing characteristics of the products

The cost of product development is roughly proportional to the number of people on the project team and to the duration of the project In addition to expenses for develop-ment effort, a firm will almost always have to make some investment in the tooling and equipment required for production This expense is often as large as the rest of the prod-uct development budget; however, it is sometimes useful to think of these expenditures as

part of the fixed costs of production For reference purposes, this production investment is

listed in Exhibit 1-3 along with the development expenditures

volume

team (peak size)

development

team (peak size)

cost

investment

EXHIBIT 1-3 Attributes of five products and their associated development efforts All figures are approximate,

based on publicly available information, estimates, and company sources.

The Challenges of Product Development

Developing great products is hard Few companies are highly successful more than half the time These odds present a significant challenge for a product development team Some of the characteristics that make product development challenging are:

• Trade-offs: An airplane can be made lighter, but this action will probably increase

manufacturing cost One of the most difficult aspects of product development is nizing, understanding, and managing such trade-offs in a way that maximizes the suc-cess of the product

recog-• Dynamics: Technologies improve, customer preferences evolve, competitors introduce

new products, and the macroeconomic environment shifts Decision making in an environment of constant change is a formidable task

• Details: The choice between using screws or snap-fits on the enclosure of a computer

can have economic implications of millions of dollars Developing a product of even modest complexity may require thousands of such decisions

• Time pressure: Any one of these difficulties would be easily manageable by itself

given plenty of time, but product development decisions must usually be made quickly and without complete information

• Economics: Developing, producing, and marketing a new product requires a large

investment To earn a reasonable return on this investment, the resulting product must

be both appealing to customers and relatively inexpensive to produce

For many people, product development is interesting precisely because it is challenging For others, several intrinsic attributes also contribute to its appeal:

• Creation: The product development process begins with an idea and ends with the

production of a physical artifact When viewed both in its entirety and at the level of individual activities, the product development process is intensely creative

• Satisfaction of societal and individual needs: All products are aimed at satisfying

needs of some kind Individuals interested in developing new products can almost always find institutional settings in which they can develop products satisfying what they consider to be important needs

• Team diversity: Successful development requires many different skills and talents As

a result, development teams involve people with a wide range of different training, experience, perspectives, and personalities

• Team spirit: Product development teams are often highly motivated, cooperative groups

The team members may be colocated so they can focus their collective energy on ing the product This situation can result in lasting camaraderie among team members

creat-Approach of This Book

We focus on product development activities that benefit from the participation of all the core functions of the firm For our purposes, we define the core functions as market-ing, design, and manufacturing We expect that team members have competence in one or

Introduction 7

more specific disciplines such as mechanical engineering, electrical engineering, industrial design, market research, or manufacturing operations For this reason, we do not discuss, for example, how to perform a stress analysis or to create a conjoint survey These are dis-ciplinary skills we expect someone on the development team to possess The integrative methods in this book are intended to facilitate problem solving and decision making among people with different disciplinary perspectives

Structured Methods

The book consists of methods for completing development activities The methods are tured, which means we generally provide a step-by-step approach and often provide templates for the key information systems used by the team We believe structured methods are valuable for three reasons: First, they make the decision process explicit, allowing everyone on the team to understand the decision rationale and reducing the possibility of moving forward with unsupported decisions Second, by acting as “checklists” of the key steps in a development activity they ensure that important issues are not forgotten Third, structured methods are largely self-documenting; in the process of executing the method, the team creates a record

struc-of the decision-making process for future reference and for educating newcomers

Although the methods are structured, they are not intended to be applied blindly The methods are a starting point for continuous improvement Teams should adapt and modify the approaches to meet their own needs and to reflect the unique character of their institu-tional environment

Industrial Examples

Each remaining chapter is built around an example drawn from industrial practice The major examples include the following: a wireless security system, a laser-based cat toy, a digital copier, a thermostat, a mountain bike suspension fork, a power nailer, a dose-metering syringe, an electric scooter, a computer printer, a mobile telephone, office seat-ing products, an automobile engine, a mobile robot, a seat belt system, a coffee-cup insulator, a coffee maker, and a microfilm cartridge In most cases we use as examples the simplest products we have access to that illustrate the important aspects of the methods When a syringe illustrates an idea as well as a jet engine, we use the syringe However, every method in this book has been used successfully in industrial practice by hundreds

of people on both large and small projects

Although built around examples, the chapters are not intended to be historically accurate case studies We use the examples as a way to illustrate development methods, and in doing so

we recast some historical details in a way that improves the presentation of the material We also disguise much of the quantitative information in the examples, especially financial data

Organizational Realities

We deliberately chose to present the methods with the assumption that the development team operates in an organizational environment conducive to success In reality, some organizations exhibit characteristics that lead to dysfunctional product development teams These characteristics include:

• Lack of empowerment of the team: General managers or functional managers may

engage in continual intervention in the details of a development project without a full understanding of the basis for the team’s decisions

• Functional allegiances transcending project goals: Representatives of marketing,

design, or manufacturing may influence decisions in order to increase the political ing of themselves or their functions without regard for the overall success of the product

stand-• Inadequate resources: A team may be unable to complete development tasks effectively

because of a lack of staff, a mismatch of skills, or a lack of money, equipment, or tools

• Lack of cross-functional representation on the project team: Key development

deci-sions may be made without involvement of marketing, design, manufacturing, or other critical functions

While most organizations exhibit one or more of these characteristics to some degree, the significant presence of these problems can be so stifling that sound development methods are rendered ineffective While recognizing the importance of basic organiza-tional issues, we assume, for clarity of explanation, that the development team operates in

an environment in which the most restrictive organizational barriers have been removed

Roadmap of the Book

We divide the product development process into six phases, as shown in Exhibit 1-4 (These phases are described in more detail in Chapter 2, Development Processes and Organizations.) This book describes the concept development phase in its entirety and the remaining phases less completely, because we do not provide methods for the more focused development activities that occur later in the process Each of the remaining chapters in this book can be read, understood, and applied independently

• Chapter 2, Development Processes and Organizations, presents a generic product development process and shows how variants of this process are used in different industrial situations The chapter also discusses the way individuals are organized into groups in order to undertake product development projects

• Chapter 3, Opportunity Identification, describes a process for creating, identifying, and screening ideas for new products

• Chapter 4, Product Planning, presents a method for deciding which products to develop The output of this method is a mission statement for a particular project

• Chapters 5 through 9, Identifying Customer Needs, Product Specifications, Concept Generation, Concept Selection, and Concept Testing, present the key activities of the concept development phase These methods guide a team from a mission statement through a selected product concept

• Chapter 10, Product Architecture, discusses the implications of product architecture on product change, product variety, component standardization, product performance, manufacturing cost, and project management; it then presents a method for establish-ing the architecture of a product

• Chapter 11, Industrial Design, discusses the role of the industrial designer and how human interaction issues, including aesthetics and ergonomics, are treated in product development

• Chapter 12, Design for Environment, considers the environmental impacts associated with products and presents a method for reducing these impacts through better design decisions

• Chapter 13, Design for Manufacturing, discusses techniques used to reduce turing cost These techniques are primarily applied during the system-level and detail-design phases of the process

manufac-Introduction 9

• Chapter 14, Prototyping, presents a method to ensure that prototyping efforts, which occur throughout the process, are applied effectively

• Chapter 15, Robust Design, explains methods for choosing values of design variables

to ensure reliable and consistent performance

• Chapter 16, Patents and Intellectual Property, presents an approach to creating a patent application and discusses the role of intellectual property in product development

• Chapter 17, Design of Services, shows how the methods in this book can be applied to the development of intangible products, and introduces a method for representing those products, the service process flow diagram

Chapter 10: Product Architecture

Chapter 11: Industrial Design Chapter 12: Design for Environment

Chapter 14: Prototyping Chapter 15: Robust Design Chapter 16: Patents and Intellectual Property

Chapter 13: Design for Manufacturing

Many More-Focused Development Methods

Development

System-Level Design

Detail Design

Testing and Refinement

Production Ramp-Up

Chapter 17: Design of Services

Chapter 19: Managing Projects Chapter 18: Product Development Economics

EXHIBIT 1-4 The product development process The diagram shows where each of the integrative methods presented in the remaining chapters is most applicable.

• Chapter 18, Product Development Economics, describes a method for understanding the influence of internal and external factors on the economic value of a project.

• Chapter 19, Managing Projects, presents some fundamental concepts for ing and representing interacting project tasks, along with a method for planning and executing a development project

understand-References and Bibliography

A wide variety of resources for this chapter and for the rest of the book are available on the Internet These resources include data, templates, links to suppliers, and lists of publications Current resources may be accessed via

www.ulrich-eppinger.net

Wheelwright and Clark devote much of their book to the very early stages of product development, which we cover in less detail

Wheelwright, Stephen C., and Kim B Clark, Revolutionizing Product Development:

Quantum Leaps in Speed, Efficiency, and Quality, The Free Press, New York, 1992.

Katzenbach and Smith write about teams in general, but most of their insights apply to product development teams as well

Katzenbach, Jon R., and Douglas K Smith, The Wisdom of Teams: Creating the

High-Performance Organization, Harvard Business School Press, Boston, 1993.

These three books provide rich narratives of development projects, including fascinating descriptions of the intertwined social and technical processes

Kidder, Tracy, The Soul of a New Machine, Avon Books, New York, 1981.

Sabbagh, Karl, Twenty-First-Century Jet: The Making and Marketing of the Boeing

777, Scribner, New York, 1996.

Walton, Mary, Car: A Drama of the American Workplace, Norton, New York, 1997.

Exercises

1 Estimate what fraction of the price of a pocket calculator is required to cover the cost

of developing the product To do this you might start by estimating the information needed to fill out Exhibit 1-3 for the pocket calculator

2 Create a set of scatter charts by plotting each of the rows in Exhibit 1-3 against the development cost row For each one, explain why there is or is not any correlation (For example, you would first plot “annual production volume” versus “development cost” and explain why there seems to be no correlation Then repeat for each of the remaining rows.)

Thought Question

1 Each of the chapters listed in Exhibit 1-4 presents a method for a portion of the uct development process For each one, consider what types of skills and expertise might be required Can you make an argument for staffing the development team from start to finish with individuals possessing all of these skills and areas of expertise?

Development Processes and Organizations

Courtesy of Tyco International

C H A P T E R T W O

EXHIBIT 2-1

A wireless security alarm system control panel, one of Tyco’s products.

Tyco International is a leading manufacturer of sensors and controls, including home and industrial security systems One of Tyco’s products is the wireless security alarm system control panel shown in Exhibit 2-1 Senior managers at Tyco wanted to estab-lish a common product development process structure that would be appropriate for all of the many different operating divisions across the company They also needed to create a product development organization that would allow Tyco to compete effectively in a variety of competitive business markets Some of the questions Tyco faced were:

• What are the key product development activities that must be included in every project?

• What project milestones and review gates can be used to manage the overall ment process by phases?

develop-• Is there a standard development process that will work for every operating division?

• What role do experts from different functional areas play in the development process?

• Should the development organization be divided into groups corresponding to projects

or to technical and business functions?

This chapter helps answer these and related questions by presenting a generic ment process and showing how this process can be adapted to meet the needs of particu-lar industrial situations We highlight the activities and contributions of different functions of the company during each phase of the development process The chapter also explains what constitutes a product development organization and discusses why different types of organizations are appropriate for different settings

develop-The Product Development Process

A process is a sequence of steps that transforms a set of inputs into a set of outputs Most people are familiar with the idea of physical processes, such as those used to bake a cake

or to assemble an automobile A product development process is the sequence of steps or

activities that an enterprise employs to conceive, design, and commercialize a product Many of these steps and activities are intellectual and organizational rather than physical Some organizations define and follow a precise and detailed development process, while others may not even be able to describe their process Furthermore, every organization employs a process at least slightly different from that of every other organization In fact, the same enterprise may follow different processes for each of several different types of development projects

A well-defined development process is useful for the following reasons:

• Quality assurance: A development process specifies the phases a development project

will pass through and the checkpoints along the way When these phases and points are chosen wisely, following the development process is one way of assuring the quality of the resulting product

check-• Coordination: A clearly articulated development process acts as a master plan that

defines the roles of each of the players on the development team This plan informs the members of the team when their contributions will be needed and with whom they will need to exchange information and materials

Development Processes and Organizations 13

• Planning: A development process includes milestones corresponding to the

comple-tion of each phase The timing of these milestones anchors the schedule of the overall development project

• Management: A development process is a benchmark for assessing the performance

of an ongoing development effort By comparing the actual events to the established process, a manager can identify possible problem areas

• Improvement: The careful documentation and ongoing review of an organization’s

development process and its results may help to identify opportunities for improvement.The generic product development process consists of six phases, as illustrated in Exhibit 2-2 The process begins with a planning phase, which is the link to advanced research and technology development activities The output of the planning phase is the project’s mission statement, which is the input required to begin the concept development phase and which serves as a guide to the development team The conclusion of the prod-uct development process is the product launch, at which time the product becomes avail-able for purchase in the marketplace

One way to think about the development process is as the initial creation of a wide set

of alternative product concepts and then the subsequent narrowing of alternatives and increasing specification of the product until the product can be reliably and repeatably produced by the production system Note that most of the phases of development are defined in terms of the state of the product, although the production process and market-ing plans, among other tangible outputs, are also evolving as development progresses.Another way to think about the development process is as an information-processing system The process begins with inputs such as the corporate objectives, strategic oppor-tunities, available technologies, product platforms, and production systems Various activ-ities process the development information, formulating specifications, concepts, and design details The process concludes when all the information required to support pro-duction and sales has been created and communicated

A third way to think about the development process is as a risk management system

In the early phases of product development, various risks are identified and prioritized As the process progresses, risks are reduced as the key uncertainties are eliminated and the functions of the product are validated When the process is completed, the team should have substantial confidence that the product will work correctly and be well received by the market

Exhibit 2-2 also identifies the key activities and responsibilities of the different tions of the organization during each development phase Because of their continuous involvement in the process, we choose to articulate the roles of marketing, design, and manufacturing Representatives from other functions, such as research, finance, project management, field service, and sales, also play key roles at particular points in the process.The six phases of the generic development process are:

func-0 Planning: The planning activity is often referred to as “phase zero” because it

precedes the project approval and launch of the actual product development process This phase begins with opportunity identification guided by corporate strategy and includes assessment of technology developments and market objectives The output of the plan-ning phase is the project mission statement, which specifies the target market for the product, business goals, key assumptions, and constraints Chapter 3, Opportunity

EXHIBIT 2-2 The generic product development process Six phases are shown, including some of the typical tasks and responsibilities of the key business functions for each phase.

• Identify lead users.

• Identify competitive products.

• Investigate feasibility of product concepts.

• Develop industrial design concepts.

• Build and test experimental prototypes.

• Estimate manufacturing cost.

• Assess production feasibility.

• Finance:

Facilitate economic analysis.

• Legal:

Investigate patent issues.

• Develop plan for product options and extended product family.

• Develop product architecture.

• Define major subsystems and interfaces.

• Refine industrial design.

• Preliminary component engineering.

• Identify suppliers for key components.

• Perform buy analysis.

make-• Define final assembly scheme.

• Finance:

Facilitate buy analysis.

make-• Service: Identify service issues.

• Develop marketing plan.

• Define part geometry.

• Choose materials.

• Assign tolerances.

• Complete industrial design control documentation.

• Define part production processes.

piece-• Design tooling.

• Define quality assurance processes.

• Begin procurement of long-lead tooling.

• Develop promotion and launch materials.

• Facilitate field testing.

• Test overall performance, reliability, and durability.

• Obtain regulatory approvals.

• Assess environmental impact.

• Implement design changes.

• Facilitate supplier ramp-up.

• Refine fabrication and assembly processes.

• Train workforce.

• Refine quality assurance processes.

• Sales: Develop sales plan.

• Place early production with key customers.

• Evaluate early production output.

• Begin full operation of production system.

• General Management: Conduct postproject review.

Detail Design

Testing and Refinement

Production Ramp-Up

Development Processes and Organizations 15

Identification, explains a process for gathering, evaluating, and choosing from a broad range of product opportunities Chapter 4, Product Planning, presents a discussion of the subsequent product planning process

1 Concept development: In the concept development phase, the needs of the target

market are identified, alternative product concepts are generated and evaluated, and one

or more concepts are selected for further development and testing A concept is a tion of the form, function, and features of a product and is usually accompanied by a set

descrip-of specifications, an analysis descrip-of competitive products, and an economic justification descrip-of the project This book presents several detailed methods for the concept development phase (Chapters 5–9) We expand this phase into each of its constitutive activities in the next section

2 System-level design: The system-level design phase includes the definition of the

product architecture, decomposition of the product into subsystems and components, preliminary design of key components, and allocation of detail design responsibility to both internal and external resources Initial plans for the production system and final assembly are usually defined during this phase as well The output of this phase usually includes a geometric layout of the product, a functional specification of each of the product’s subsystems, and a preliminary process flow diagram for the final assembly process Chapter 10, Product Architecture, discusses some of the important activities of system-level design

3 Detail design: The detail design phase includes the complete specification of the

geometry, materials, and tolerances of all of the unique parts in the product and the identification of all of the standard parts to be purchased from suppliers A process plan is established and tooling is designed for each part to be fabricated within the production

system The output of this phase is the control documentation for the product—the

draw-ings or computer files describing the geometry of each part and its production tooling, the specifications of the purchased parts, and the process plans for the fabrication and assembly of the product Three critical issues that are best considered throughout the product development process, but are finalized in the detail design phase, are materials selection, production cost, and robust performance These issues are discussed respec-tively in Chapter 12, Design for Environment, Chapter 13, Design for Manufacturing, and Chapter 15, Robust Design

4 Testing and refinement: The testing and refinement phase involves the

construc-tion and evaluaconstruc-tion of multiple preproducconstruc-tion versions of the product Early (alpha) prototypes are usually built with production-intent parts—parts with the same geome-

try and material properties as intended for the production version of the product but not necessarily fabricated with the actual processes to be used in production Alpha prototypes are tested to determine whether the product will work as designed and

whether the product satisfies the key customer needs Later (beta) prototypes are

usu-ally built with parts supplied by the intended production processes but may not be assembled using the intended final assembly process Beta prototypes are extensively evaluated internally and are also typically tested by customers in their own use environment The goal for the beta prototypes is usually to answer questions about performance and reliability to identify necessary engineering changes for the final product Chapter 14, Prototyping, presents a thorough discussion of the nature and use

of prototypes

5 Production ramp-up: In the production ramp-up phase, the product is made using

the intended production system The purpose of the ramp-up is to train the workforce and

to work out any remaining problems in the production processes Products produced ing production ramp-up are sometimes supplied to preferred customers and are carefully evaluated to identify any remaining flaws The transition from production ramp-up to ongoing production is usually gradual At some point in this transition, the product is

dur-launched and becomes available for widespread distribution A postlaunch project review

may occur shortly after the launch This review includes an assessment of the project from both commercial and technical perspectives and is intended to identify ways to improve the development process for future projects

Concept Development: The Front-End Process

Because the concept development phase of the development process demands perhaps more coordination among functions than any other, many of the integrative development methods presented in this book are concentrated here In this section we expand the con-

cept development phase into what we call the front-end process The front-end process

generally contains many interrelated activities, ordered roughly as shown in Exhibit 2-3.Rarely does the entire process proceed in purely sequential fashion, completing each activ-ity before beginning the next In practice, the front-end activities may be overlapped in time and iteration is often necessary The dashed arrows in Exhibit 2-3 reflect the uncertain nature of progress in product development At almost any stage, new information may become available

or results learned that can cause the team to step back to repeat an earlier activity before

pro-ceeding This repetition of nominally complete activities is known as development iteration.

The concept development process includes the following activities:

• Identifying customer needs: The goal of this activity is to understand customers’

needs and to effectively communicate them to the development team The output of this step is a set of carefully constructed customer need statements, organized in a hierarchical list, with importance weightings for many or all of the needs Special

attention is paid to the identification of latent needs, which are difficult for customers

to articulate and unaddressed by existing products A method for this activity is sented in Chapter 5, Identifying Customer Needs

pre-• Establishing target specifications: Specifications provide a precise description of what

a product has to do They are the translation of the customer needs into technical terms

Identify

Customer

Needs

Establish Target Specifications

Generate Product Concepts

Select Product Concept(s)

Test Product Concept(s)

Set Final Specifications

Plan Downstream Development

Development Plan Mission

Statement

Build and Test Models and Prototypes Benchmark Competitive Products Perform Economic Analysis

EXHIBIT 2-3 The many front-end activities comprising the concept development phase.

Development Processes and Organizations 17

Targets for the specifications are set early in the process and represent the hopes of the development team Later these specifications are refined to be consistent with the con-straints imposed by the team’s choice of a product concept The output of this stage is

a list of target specifications Each specification consists of a metric, and marginal and ideal values for that metric A method for the specification activity is given in Chapter 6, Product Specifications

• Concept generation: The goal of concept generation is to thoroughly explore the space

of product concepts that may address the customer needs Concept generation includes

a mix of external search, creative problem solving within the team, and systematic exploration of the various solution fragments the team generates The result of this activity is usually a set of 10 to 20 concepts, each typically represented by a sketch and brief descriptive text Chapter 7, Concept Generation, describes this activity in detail

• Concept selection: Concept selection is the activity in which various product concepts

are analyzed and sequentially eliminated to identify the most promising concept(s) The process usually requires several iterations and may initiate additional concept generation and refinement A method for this activity is described in Chapter 8, Concept Selection

• Concept testing: One or more concepts are then tested to verify that the customer needs

have been met, assess the market potential of the product, and identify any ings that must be remedied during further development If the customer response is poor, the development project may be terminated or some earlier activities may be repeated as necessary Chapter 9, Concept Testing, explains a method for this activity

shortcom-• Setting final specifications: The target specifications set earlier in the process are

revis-ited after a concept has been selected and tested At this point, the team must commit to specific values of the metrics reflecting the constraints inherent in the product concept, limitations identified through technical modeling, and trade-offs between cost and per-formance Chapter 6, Product Specifications, explains the details of this activity

• Project planning: In this final activity of concept development, the team creates a

detailed development schedule, devises a strategy to minimize development time, and identifies the resources required to complete the project The major results of the front-

end activities can be usefully captured in a contract book, which contains the mission

statement, the customer needs, the details of the selected concept, the product cations, the economic analysis of the product, the development schedule, the project staffing, and the budget The contract book serves to document the agreement (con-tract) between the team and the senior management of the enterprise A project plan-ning method is presented in Chapter 19, Managing Projects

specifi-• Economic analysis: The team, often with the support of a financial analyst, builds an

economic model for the new product This model is used to justify continuation of the overall development program and to resolve specific trade-offs between, for example, development costs and manufacturing costs Economic analysis is shown as one of the ongoing activities in the concept development phase An early economic analysis will almost always be performed before the project even begins, and this analysis is updated as more information becomes available A method for this activity is pre-sented in Chapter 18, Product Development Economics

• Benchmarking of competitive products: An understanding of competitive products is

critical to successful positioning of a new product and can provide a rich source of

ideas for the product and production process design Competitive benchmarking is

per-formed in support of many of the front-end activities Various aspects of competitive benchmarking are presented in Chapters 5–9

• Modeling and prototyping: Every stage of the concept development process involves

vari-ous forms of models and prototypes These may include, among others: early concept” models, which help the development team to demonstrate feasibility; “form-only” models, which can be shown to customers to evaluate ergonomics and style; spreadsheet models of technical trade-offs; and experimental test models, which can be used to set design parameters for robust performance Methods for modeling, prototyping, and testing are discussed throughout the book, including in Chapters 5–7, 9, 11, 14, 15 and 17

“proof-of-Adapting the Generic Product Development Process

The development process described by Exhibits 2-2 and 2-3 is generic, and particular processes will differ in accordance with the unique context of the firm and the challenges

of any specific project The generic process is most like the process used in a market-pull

situation: a firm begins product development with a market opportunity and then uses whatever available technologies are required to satisfy the market need (i.e., the market

“pulls” the development decisions) In addition to the market-pull process outlined

in  Exhibits 2-2 and 2-3, several variants are common and correspond to the following:

technology-push products, platform products, process-intensive products, customized products, high-risk products, quick-build products, product-service systems, and complex systems

Each of these situations is described below The characteristics of these situations and the resulting deviations from the generic process are summarized in Exhibit 2-4

Technology-Push Products

In developing technology-push products, the firm begins with a new proprietary ogy and looks for an appropriate market in which to apply this technology (that is, the technology “pushes” development) Gore-Tex, an expanded Teflon sheet manufactured by

technol-W L Gore Associates, is a striking example of technology push The company has oped dozens of products incorporating Gore-Tex, including artificial veins for vascular surgery, insulation for high-performance electric cables, fabric for outerwear, dental floss, and liners for bagpipe bags

devel-Many successful technology-push products involve basic materials or basic process technologies This may be because basic materials and processes are deployed in thou-sands of applications, and there is therefore a high likelihood that new and unusual char-acteristics of materials and processes can be matched with an appropriate application.The generic product development process can be used with minor modifications for technology-push products The technology-push process begins with the planning phase,

in which the given technology is matched with a market opportunity Once this matching has occurred, the remainder of the generic development process can be followed The team includes an assumption in the mission statement that the particular technology will

be embodied in the product concepts considered by the team Although many extremely successful products have arisen from technology-push development, this approach can be perilous The product is unlikely to succeed unless (1) the assumed technology offers a clear competitive advantage in meeting customer needs, and (2) suitable alternative technologies

Development Processes and Organizations 19

The team begins with a new technology, then finds an appropriate market.

The team assumes that the new product will be built around an established technological subsystem.

Characteristics of the product are highly constrained by the production process.

New products are slight variations of existing configurations.

Technical or market uncertainties create high risks of failure.

Rapid modeling and prototyping enables many design-build-test cycles.

Products and their associated service elements are developed simultaneously

System must be decomposed into several subsystems and many components.

Process generally includes distinct planning, concept development, system-level design, detail design, testing and refinement, and production ramp-up phases.

Planning phase involves matching technology and market Concept development assumes a given technology.

Concept development assumes a proven technology platform.

Either an existing production process must be specified from the start, or both product and process must be developed together from the start.

Similarity of projects allows for a streamlined and highly structured development process.

Risks are identified early and tracked throughout the process.

Analysis and testing activities take place as early

as possible.

Detail design and testing phases are repeated a number of times until the product is completed or time/budget runs out.

Both physical and operational elements are developed, with particular attention to design

of the customer experience and the process flow

Subsystems and components are developed

by many teams working in parallel, followed by system integration and validation.

Sporting goods, furniture, tools.

Gore-Tex rainwear, Tyvek envelopes.

Consumer electronics, computers, printers.

Snack foods, breakfast cereals, chemicals, semiconductors.

Motors, switches, batteries, containers.

Pharmaceuticals, space systems.

Software, cellular phones.

Restaurants, software applications, financial services.

Airplanes, jet engines, automobiles.

EXHIBIT 2-4 Summary of variants of generic product development process.

are unavailable or very difficult for competitors to utilize Project risk can possibly be minimized by simultaneously considering the merit of a broader set of concepts that do not necessarily incorporate the new technology In this way, the team verifies that the product concept embodying the new technology is superior to the alternatives.

Platform Products

A platform product is built around a preexisting technological subsystem (a technology

platform) Examples of such platforms include the Intel chipset in a personal computer, the

Apple iPhone operating system, and the blade design in a Gillette razor Huge investments are made in developing such platforms, and therefore every attempt is made to incorporate them into several different products In some sense, platform products are very similar to technology-push products in that the team begins the development effort with an assump-tion that the product concept will embody a particular technology One difference is that a technology platform has already demonstrated its usefulness in the marketplace in meeting customer needs The firm can in many cases assume that the technology will also be useful

in related markets Products built on technology platforms are much simpler to develop than if the technology were developed from scratch For this reason, and because of the possible sharing of costs across several products, a firm may be able to offer a platform product in markets that could not justify the development of a unique technology

Process-Intensive Products

Examples of process-intensive products include semiconductors, foods, chemicals, and paper For these products, the production process places strict constraints on the proper-ties of the product, so that the product design cannot be separated, even at the concept phase, from the production process design In many cases, process-intensive products are produced in very high volumes and are bulk, as opposed to discrete, goods

In some situations, a new product and new process are developed simultaneously For example, creating a new shape of breakfast cereal or snack food will require both product and process development activities In other cases, a specific existing process for making the product is chosen in advance, and the product design is constrained by the capabilities

of this process This might be true of a new paper product to be made in a particular paper mill or a new semiconductor device to be made in an existing wafer fabrication facility

a structured flow of information (analogous to a production process) For customized ucts, the generic process is augmented with a detailed description of the specific information-processing activities required within each of the phases Such development processes may consist of hundreds of carefully defined activities and may be highly automated

prod-Development Processes and Organizations 21

High-Risk Products

The product development process addresses many types of risk These include technical risk (Will the product function properly?), market risk (Will customers like what the team develops?), and budget and schedule risk (Can the team complete the project on time and within budget?) High-risk products are those that entail unusually large uncertainties related to the technology or market so that there is substantial technical or market risk The generic product development process is modified in high-risk situations by taking steps to address the largest risks in the early stages of product development This usually requires completing some design and test activities earlier in the process For example, when there is great uncertainty regarding customer acceptance of a new product, concept testing using renderings or user-interface prototypes may be done very early in the process in order to reduce the market uncertainty and risk If there is high uncertainty related to technical performance of the product, it makes sense to build working models

of the key features and to test these earlier in the process Multiple solution paths may be explored in parallel to ensure that one of the solutions succeeds Design reviews must assess levels of risk on a regular basis, with the expectation that risks are being reduced over time and not being postponed

Quick-Build Products

For the development of some products, such as software and many electronics products, building and testing prototype models is such a rapid process that the design-build-test cycle can be repeated many times In fact, teams can take advantage of rapid iteration to achieve a more flexible and responsive product development process, sometimes called a

spiral product development process Following concept development in this process, the

system-level design phase entails decomposition of the product into high-, medium-, and low-priority features This is followed by several cycles of design, build, integrate, and test activities, beginning with the highest-priority items This process takes advantage of the fast prototyping cycle by using the result of each cycle to learn how to modify the pri-orities for the next cycle Customers may even be involved in the testing process after one

or more cycles When time or budget runs out, usually all of the high- and medium-priority features have been incorporated into the evolving product, and the low-priority features may be omitted until the next product generation

Product- Service Systems

Services are largely intangible product offerings and are often provided in conjunction

with tangible products Examples of product- service systems are automobile rentals,

res-taurants, and mobile communications Services are largely developed using the standard product development methods described throughout this book; however, because custom-ers are so intimately involved in the service delivery process, service design teams pay careful attention to the range of customer needs and the timing of key touch points in creating the service experience Many services are produced and consumed at the same time and therefore matching supply with demand is critical Design of the service process flow may take advantage of a modular architecture in order to deliver customized services

to every customer Chapter 17, Design of Services, discusses these and other distinctions

in the process for developing product- service systems

Complex Systems

Larger-scale products such as automobiles and airplanes are complex systems comprising many interacting subsystems and components When developing complex systems, modifications to the generic product development process address a number of system-level issues The concept development phase considers the architecture of the entire system, and multiple architectures may be considered as competing concepts for the over-all system The system-level design phase becomes critical During this phase, the system

is decomposed into subsystems and these further into many components Teams are assigned to develop each component Additional teams are assigned the special challenge

of integrating components into the subsystems and these into the overall system

Detail design of the components is a highly parallel process in which the many opment teams work at once, usually separately Managing the network of interactions across the components and subsystems is the task of systems engineering specialists of many kinds The testing and refinement phase includes not only component and system integration, but also extensive testing and validation at all levels

devel-Product Development Process Flows

The product development process generally follows a structured flow of activity and

information flow This allows us to draw process flow diagrams illustrating the process,

as shown in Exhibit 2-5 The generic process flow diagram (a) depicts the process used to develop market-pull, technology-push, platform, process-intensive, customized, and

Preliminary Design Review

Critical Design Review

Production Approval

System-Level Design

Detail Design

Testing and Refinement

Production Ramp-Up

Cycle Plan Review

Cycle Review

System-Level Design Design Build

Many Iteration Cycles

System Review

Production Approval

System-Level Design

Design Test

Integrate and Test Design Test

Design Test Design Test

Validation and Ramp-Up

Project Review

Project Review

Project Review

EXHIBIT 2-5 Process flow diagrams for three product development processes.

Development Processes and Organizations 23

high-risk products Each product development phase (or stage) is followed by a review (or gate) to confirm that the phase is completed and to determine whether the project pro-ceeds Quick-build products enable a spiral product development process (b) whereby detail design, prototyping, and test activities are repeated a number of times The process flow diagram for development of complex systems (c) shows the decomposition into par-allel stages of work on the many subsystems and components Once the product development process has been established within an organization, a process flow diagram

is used to explain the process to everyone on the team

The Tyco Product Development Process

Tyco is primarily a market-pull enterprise This means that Tyco generally drives its opment projects based on a perceived market need and utilizes new or established technolo-gies to meet that need Its competitive advantage arises from highly effective marketing channels worldwide, strong brand recognition, a large installed base of equipment, and an ability to integrate new technologies into its product lines For this reason, the technology-push process would not be appropriate Most Tyco products are assembled from compo-nents fabricated with relatively conventional processes such as molding, machining, and electronics assembly Products are generally customized for a particular customer in the final sales and installation processes, so the development process at Tyco is primarily aimed

devel-at credevel-ation of new models of products, rdevel-ather than devel-at the customizdevel-ation of existing models.Tyco therefore established a common product development process similar to the generic phased process The resulting Tyco Rally Point process flow is illustrated in Exhibit 2-6 Note that there are nine phases in the Rally Point process, with six of the phases (from concept definition to process verification) comprising the fundamental prod-uct development process activities Each phase is followed by a critical review (called a Rally Point), which is required to gain approval to proceed to the next phase The primary goal and key activities of each phase as well as the business function responsible for each activity are shown in Exhibit 2-7

Although Tyco established Rally Point as its standard process, Tyco managers realized that this process would not be perfectly suitable for all Tyco development projects across all business units; therefore, one key activity in the concept definition phase is to select a Rally Point process variant if necessary For example, some of Tyco’s new products are based on existing technology platforms To develop such derivative products, the team assumes the use of the existing technology platform during concept development Also, some products are designed for specific customers as private-label variants of standard

EXHIBIT 2-6 Tyco’s Rally Point product development process includes nine distinct phases and review gates.

Concept

Definition

CONCEIVE

Feasibility and Planning

Preliminary Design

Final Design

Product Verification

Process Verification Launch

Post-Launch Assessment

Courtesy of Tyco International